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UNITED STATES ý
ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December
31, 2009 ¨
TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from
to Commission
file number 0-15476 ZAXIS
INTERNATIONAL INC. Registrant's
Telephone Number, Including Area Code: (323) 951-0575 Securities
Registered Pursuant to Section 12(g) of The Act: Common Stock, $0.0001 Indicate by check
mark whether the registrant (1) has filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes x No ¨ On December 31,
2009, the aggregate market value of the 235,126 common stock held by non-affiliates of the
registrant was approximately $23,000 based on the asked price of the Registrants common
stock on December 31, 2009. On December 31, 2009, the Registrant had 1,373,126 shares of
common stock outstanding. Indicate by check
mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer (as
defined in Rule 12b-2 of the Exchange Act) or a smaller
reporting company . Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨ Page PART I ITEM
1. ITEM
2. ITEM
3. ITEM
4.
PART II ITEM
5. ITEM
7. ITEM
8. ITEM
9. ITEM
9A.
PART III ITEM 10. ITEM 11. ITEM 12. ITEM 13. ITEM 14. ITEM 15. Cautionary Statement regarding Forward-Looking
Statements This Annual Report on Form 10-K
includes forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. The Registrant has based these forward-looking statements on its current
expectations and projections about future events. These forward-looking statements are
subject to known and unknown risks, uncertainties and assumptions about the Registrant
that may cause its actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by such forward-looking statements. In some cases, you
can identify forward-looking statements by terminology such as "may,"
"will," "should," "could," "would,"
"expect," "plan," "anticipate," "believe,"
"estimate," "continue," or the negative of such terms or other similar
expressions. Factors that might cause or contribute to such a discrepancy include, but are
not limited to, those described in this Annual Report on Form 10-K and in the Registrant's
other Securities and Exchange Commission filings. PART I ITEM 1. DESCRIPTION OF BUSINESS Back to Table of Contents Organizational
History and General Background of the Registrant Zaxis International Inc. was
incorporated in Ohio in 1989 and is sometimes
referred to herein as "we", "us", "our", "Zaxis",
"Company" and the "Registrant". On August 25,
1995, Zaxis merged with a subsidiary of The InFerGene Company ("InFerGene") and
InFerGene changed its name to Zaxis International Inc. For accounting and tax purposes,
the merger was treated as a reverse acquisition. The Company was a biotechnology holding company that
operated its business through a wholly owned subsidiary. The Company was a manufacturer
and distributor of products that were used in a molecular separation process known as
electrophoresis, a procedure used in more than 55,000 research, industrial and clinical
laboratories worldwide. The more common applications of this procedure include
protein-based separations such as the HDL and LDL components and sub-components of
cholesterol, the identification of various genes and gene products (e.g. DNA, RNA, etc.)
and the separation and identification of proteins in drug discovery applications
(Proteomics). A variety of techniques, formats, materials, compounds, equipment and
devices are employed in electrophoresis and Zaxis provided products to meet these needs.
The primary focus of the Company's former research and development efforts as well as its
former sales and marketing efforts were targeted toward the consumables segment of this
market. The Company's core products were the pre-cast gels and reagents used in these
electrophoresis procedures. The Company believed that its products were well
positioned to take advantage of rapidly growing markets. The Company was not able to
generate sufficient revenues to support its operating expenses during fiscal year 2002. In
addition, the Company was not able to raise additional capital to fund its negative cash
flow from operations through borrowings or equity financing to support and expand its
business plan. On November 6, 2002, the Registrant filed a voluntary
petition under the U.S. Bankruptcy Code in the U.S. Bankruptcy Court Northern District of
Ohio. On October 13, 2004, the Company emerged from bankruptcy free and clear of liens,
claims and other obligations. The
court order authorized (i) that the existing officers and directors were deemed removed
from office; (ii) the appointment of new members to the Registrant's board of directors;
(iii) the amendment of Registrant's Certificate of Incorporation to increase the number of
authorized shares to 100,000,000 shares; (iv) the issuance up to 30,000,000 shares of
common stock, par value $0.0001, to the new management of the Registrant, which management
was appointed by the newly-constituted board of directors; (v) the authority of the board
of directors to implement a reverse split of the issued and outstanding shares in a ratio
to be determined by the board of directors; (vi) the cancellation and extinguishment of
all common share conversion rights of any kind, including without limitation, warrants,
options, convertible bonds, other convertible debt instruments and convertible preferred
stock; and (vii) the cancellation and extinguishment of all preferred shares of every
series and accompanying conversion rights of any kind. As a
result of the Bankruptcy Court order, Ivo Heiden was
appointed to the board of
director of the Registrant. Mr. Heiden was subsequently appointed as sole officer of the
Registrant ("Management"). Business Objectives of the Registrant The Registrant has no present operations. Management determined to direct its
efforts and limited resources to pursue and effect a business combination. Current
trends Management believes that as
a result of the relative uncertainty in the United States equity markets over the past few
years, many privately-held companies have been closed off from the public market and
traditional IPO's. During the past few years, many privately-held or public companies
attempted to divest non-core assets and divisions and valuations of these assets and
divisions have decreased significantly. Therefore, Management believes that there are
substantial business opportunities to effect attractive acquisitions. As a public entity
with its shares of common stock registered under the Exchange Act and publicly trading,
Management believes to be well positioned to identify target acquisitions and to effect a
business combination in order to take advantage of these current trends. Effecting a business combination Prospective buyers of the
Company's common stock will invest in the Company without an opportunity to evaluate the
specific merits or risks of any one or more business combinations. A business combination
may involve the acquisition of, or merger with, a company which needs to raise substantial
additional capital by means of being a publicly trading company, while avoiding what it
may deem to be adverse consequences of undertaking a public offering itself. These include
time delays, significant expense, loss of voting control and compliance with various
Federal and state securities laws. A business combination may involve a company which may
be financially unstable or in its early stages of development or growth. The
Registrant has not identified a target business or target industry The Company's effort in
identifying a prospective target business will not be limited to a particular industry and
the Company may ultimately acquire a business in any industry Management deems
appropriate. To date, the Company has not selected any target business on which to
concentrate our search for a business combination. While the Company intends to focus on
target businesses in the United States, it is not limited to those entities and may
consummate a business combination with a target business outside of the United States.
Accordingly, there is no basis for investors in the Company's common stock to evaluate the
possible merits or risks of the target business or the particular industry in which we may
ultimately operate. To the extent we effect a business combination with a financially
unstable company or an entity in its early stage of development or growth, including
entities without established records of sales or earnings, we may be affected by numerous
risks inherent in the business and operations of financially unstable and early stage or
potential emerging growth companies. In addition, to the extent that we effect a business
combination with an entity in an industry characterized by a high level of risk, we may be
affected by the currently unascertainable risks of that industry. An extremely high level
of risk frequently characterizes many industries which experience rapid growth. In
addition, although the Company's Management will endeavor to evaluate the risks inherent
in a particular industry or target business, we cannot assure you that we will properly
ascertain or assess all significant risk factors. Sources
of target businesses The Registrant anticipates
that target business candidates will be brought to our attention from various unaffiliated
sources, including securities broker-dealers, investment bankers, venture capitalists,
bankers and other members of the financial community, who may present solicited or
unsolicited proposals. Our Management may also bring to our attention target business
candidates. While we do not presently anticipate engaging the services of professional
firms that specialize in business acquisitions on any formal basis, we may engage these
firms in the future, in which event we may pay a finder's fee or other compensation. In no
event, however, will we pay Management any finder's fee or other compensation for services
rendered to us prior to or in connection with the consummation of a business combination. Selection
of a target business and structuring of a business combination Management owns 73% of the issued and
outstanding shares and will have broad flexibility in identifying and selecting a
prospective target business. In evaluating a prospective target business, our Management
will consider, among other factors, the following: financial condition and results of operation of
the target company; These criteria are not
intended to be exhaustive. Any evaluation relating to the merits of a particular business
combination will be based, to the extent relevant, on the above factors as well as other
considerations deemed relevant by our Management in effecting a business combination
consistent with our business objective. In evaluating a prospective target business, we
will conduct a due diligence review which will encompass, among other things, meetings
with incumbent management and inspection of facilities, as well as review of financial and
other information which will be made available to us. We will endeavor to
structure a business combination so as to achieve the most favorable tax treatment to us,
the target business and both companies' stockholders. We cannot assure you, however, that
the Internal Revenue Service or appropriate state tax authority will agree with our tax
treatment of the business combination. The time and costs required
to select and evaluate a target business and to structure and complete the business
combination cannot presently be ascertained with any degree of certainty. Any costs
incurred with respect to the identification and evaluation of a prospective target
business with which a business combination is not ultimately completed will result in a
loss to us. Probable
lack of business diversification We may seek to effect
business combinations with more than one target business, it is probable that we will have
the ability to effect only a single business combination. Accordingly, the prospects for
our success may be entirely dependent upon the future performance of a single business.
Unlike other entities which may have the resources to complete several business
combinations of entities operating in multiple industries or multiple areas of a single
industry, it is probable that we will not have the resources to diversify our operations
or benefit from the possible spreading of risks or offsetting of losses. By consummating a
business combination with only a single entity, our lack of diversification may: subject us to numerous economic, competitive and regulatory developments, any or
all of which may have a substantial adverse impact upon the particular industry in which
we may operate subsequent to a business combination, and Limited
ability to evaluate the target business' management Although we intend to
closely scrutinize the management of a prospective target business when evaluating the
desirability of effecting a business combination, we cannot assure you that our assessment
of the target business' management will prove to be correct. In addition, we cannot assure
you that the future management will have the necessary skills, qualifications or abilities
to manage a public company intending to embark on a program of business development.
Furthermore, the future role of our director, if any, in the target business cannot
presently be stated with any certainty. While it is possible that our director will remain
associated in some capacity with us following a business combination, it is unlikely that
he will devote his full efforts to our affairs subsequent to a business combination.
Moreover, we cannot assure you that our director will have significant experience or
knowledge relating to the operations of the particular target business. Following a business
combination, we may seek to recruit additional managers to supplement the incumbent
management of the target business. We cannot assure you that we will have the ability to
recruit additional managers, or that additional managers will have the requisite skills,
knowledge or experience necessary to enhance the incumbent management. Competition In identifying, evaluating
and selecting a target business, we expect to encounter intense competition from other
entities having a business objective similar to ours. Many of these entities are well
established and have extensive experience identifying and effecting business combinations
directly or through affiliates. Many of these competitors possess greater technical, human
and other resources than us and our financial resources will be relatively limited when
contrasted with those of many of these competitors. While we believe there are numerous
potential target businesses, our ability to compete in acquiring certain sizable target
businesses will be limited by our limited financial resources. This inherent competitive
limitation gives others an advantage in pursuing the acquisition of a target business.
Further, any of these obligations may place us at a competitive disadvantage in
successfully negotiating a business combination. Our Management believes, however, that
our status as a public entity and potential access to the United States public equity
markets may give us a competitive advantage over privately-held entities having a similar
business objective in acquiring a target business with significant growth potential on
favorable terms. If we succeed in effecting a
business combination, there will be, in all likelihood, intense competition from
competitors of the target business. In particular, certain industries which experience
rapid growth frequently attract an increasingly larger number of competitors, including
competitors with increasingly greater financial, marketing, technical and other resources
than the initial competitors in the industry. The degree of competition characterizing the
industry of any prospective target business cannot presently be ascertained. We cannot
assure you that, subsequent to a business combination, we will have the resources to
compete effectively, especially to the extent that the target business is in a high-growth
industry. Employees Mr. Heiden, our CEO and CFO,
is our sole executive officer. Mr. Heiden is not obligated to contribute any
specific number of hours per week and intend to devote only as much time as he deem
necessary to the Company's affairs. The amount of time he will devote in any time period
will vary based on the availability of suitable target businesses to investigate. We do
not intend to have any full time employees prior to the consummation of a business
combination. Conflicts of Interest The Company's Management is not required
to commit its full time to the Company's affairs. As a result, pursuing new business
opportunities may require a greater period of time than if Management would devote his
full time to the Company's affairs. Management is not precluded from serving as officer or
director of any other entity that is engaged in business activities similar to those of
the Registrant. Management has not identified and is not currently negotiating a new
business opportunity for us. In the future, Management may become associated or affiliated
with entities engaged in business activities similar to those we intend to conduct. In
such event, Management may have conflicts of interest in determining to which entity a
particular business opportunity should be presented. In the event that the Company's
Management has multiple business affiliations, it may have legal obligations to present
certain business opportunities to multiple entities. In the event that a conflict of
interest shall arise, Management will consider factors such as reporting status,
availability of audited financial statements, current capitalization and the laws of
jurisdictions. If several business opportunities or operating entities approach Management
with respect to a business combination, Management will consider the foregoing factors as
well as the preferences of the Management of the operating company. However, Management
will act in what it believes will be in the best interests of the shareholders of the
Registrant. The Registrant shall not enter into a transaction with a target business that
is affiliated with Management. Periodic Reporting and Audited Financial Statements We have registered our
securities under the Securities Exchange Act of 1934, as amended, and have reporting
obligations, including the requirement that we file annual and quarterly reports with the
SEC. In accordance with the requirements of the Securities Exchange Act of 1934, our
annual reports will contain financial statements audited and reported on by our
independent public accountants. We will not acquire a target
business if audited financial statements cannot be obtained for the target business. Our
Management believes that the requirement of having available audited financial statements
for the target business will limit the pool of potential target businesses available for
acquisition. ITEM 1A. RISK FACTORS RELATED TO OUR
BUSINESS Back to Table of Contents Any
investment in our shares of common stock involves a high degree of risk. You should
carefully consider the following information about these risks, together with the other
information contained in this annual report before you decide to invest in our common
stock. Each of the following risks may materially and adversely affect our business
objective, plan of operation and financial condition. These risks may cause the market
price of our common stock to decline, which may cause you to lose all or a part of the
money you invested in our common stock. We provide the following cautionary discussion of
risks, uncertainties and possible inaccurate assumptions relevant to our business plan. In addition to other information included in this annual report, the following
factors should be considered in evaluating the Company's business and future prospects. The Company has a limited operating history
and very limited resources. Since emerging from bankruptcy, the Company's operations
have been limited to seeking a potential business combination and has had no revenues from
operations. Investors will have no basis upon which to evaluate the Company's ability to
achieve the Company's business objective, which is to effect a merger, capital stock
exchange, acquire an operating business. The Company will not generate any revenues until,
at the earliest, after the consummation of a business combination or seeking new business
opportunities. Since the Company has not currently selected
a particular target industry or target business with which to complete a business
combination, the Company is unable to currently ascertain the merits or risks of the
business' operations. Since the Company has not yet identified a particular
industry or prospective target business, there is no basis for investors to evaluate the
possible merits or risks of the particular industry in which the Company may ultimately
operate or the target business which the Company may ultimately acquire. To the extent the
Company completes a business combination with a financially unstable company or an entity
in its development stage, the Company may be affected by numerous risks inherent in the
business operations of those entities. Although the Company's Management will endeavor to
evaluate the risks inherent in a particular industry or target business, the Company
cannot assure you that it will properly ascertain or assess all of the significant risk
factors. There can be no assurance that any prospective business
combination will benefit shareholders or prove to be more favorable to shareholders than
any other investment that may be made by shareholders and investors. Unspecified and
unascertainable risks There is no basis for shareholders to
evaluate the possible merits or risks of potential business combination or the particular
industry in which the Company may ultimately operate. To the extent that the Company
effects a business combination with a financially unstable operating company or an entity
that is in its early stage of development or growth, including entities without
established records of revenues or income, the Company will become subject to numerous
risks inherent in the business and operations of that financially unstable company. In
addition, to the extent that the Company effects a business combination with an entity in
an industry characterized by a high degree of risk, the Company will become subject to the
currently unascertainable risks of that industry. An extremely high level of risk
frequently characterizes certain industries that experience rapid growth. Although
Management will endeavor to evaluate the risks inherent in a particular business or
industry, there can be no assurance that Management will properly ascertain or assess all
such risks or that subsequent events may not alter the risks that the Company perceived at
the time of the consummation of a business combination. It is likely that the Company's current
officer and director will resign upon consummation of a business combination and the
Company will have only limited ability to evaluate the management of the target business. The Company's ability to successfully effect a business
combination will be dependent upon the efforts of the Company's Management. The future
role of the Company's key personnel in the target business, however, cannot presently be
ascertained. Although it is possible that Management will remain associated in various
capacities with the target business following a business combination, it is likely that
the management of the target business at the time of the business combination will remain
in place. Although the Company intends to closely scrutinize the management of a
prospective target business in connection with evaluating the desirability of effecting a
business combination, the Company cannot assure you that the Company's assessment of
management will prove to be correct. Dependence on key personnel The Company is dependent upon the
continued services of its officer and director. To the extent that his services become
unavailable, the Company will be required to obtain other qualified personnel and there
can be no assurance that it will be able to recruit and hire qualified persons upon
acceptable terms. The Company's officer and director may
allocate his time to other businesses thereby causing conflicts of interest in his
determination as to how much time to devote to the Company's affairs. This could have a
negative impact on the Company's ability to consummate a business combination. The Company's officer and director is not required to
commit his full time to the Company's affairs, which may result in a conflict of interest
in allocating his time between the Company's business and other businesses. The Company
does not intend to have any full time employees prior to the consummation of a business
combination. Management of the Company is engaged in several other business endeavors and
is not obligated to contribute any specific number of his hours per week to the Company's
affairs. If Management's other business affairs require him to devote more substantial
amounts of time to such affairs, it could limit his ability to devote time to the
Company's affairs and could have a negative impact on the Company's ability to consummate
a business combination. The Company's officer and director is now,
and may in the future become, affiliated with entities engaged in business activities
similar to those intended to be conducted by this Company and, accordingly, may have
conflicts of interest in determining which entity a particular business opportunity should
be presented to. The Company's officer and director is now, and may in
the future become, affiliated with entities, including other companies, engaged in
business activities similar to those intended to be conducted by this Company.
Additionally, the Company's office and director may become aware of business opportunities
which may be appropriate for presentation to this Company as well as the other entities
with which he is or may be affiliated. Additionally, due to the Company's officer and
director existing affiliations with other entities, he may have a fiduciary obligation to
present potential business opportunities to those entities in addition to presenting them
to us which could cause additional conflicts of interest. Accordingly, Management may have
conflicts of interest in determining to which entity a particular business opportunity
should be presented. It is probable that the Company will only be
able to enter into one business combination, which will cause us to be solely dependent on
such single business and a limited number of products or services. It is probable that the Company will enter into a
business combination with a single operating business. Accordingly, the prospects for the
Company's success may be: solely
dependent upon the performance of a single operating business, or In this case, the Company will not be able to diversify
the Company's operations or benefit from the possible spreading of risks or offsetting of
losses, unlike other entities which may have the resources to complete several business
combinations in different industries or different areas of a single industry. The Company has limited resources and there
is significant competition for business combination opportunities. Therefore, the Company
may not be able to enter into or consummate an attractive business combination. The Company expects to encounter intense competition
from other entities having a business objective similar to the Company's, including
venture capital funds, leveraged buyout funds and operating businesses competing for
acquisitions. Many of these entities are well established and have extensive experience in
identifying and effecting business combinations directly or through affiliates. Many of
these competitors possess greater technical, human and other resources than the Company
does and the Company's financial resources are limited when contrasted with those of many
of these competitors. While the Company believes that there are numerous potential target
businesses that it could acquire, the Company's ability to compete in acquiring certain
sizable target businesses will be limited by the Company's limited financial resources and
the fact that the Company will use its common stock to acquire an operating business. This
inherent competitive limitation gives others an advantage in pursuing the acquisition of
certain target businesses. The Company may be unable to obtain
additional financing, if required, to complete a business combination or to fund the
operations and growth of the target business, which could compel the Company to
restructure a potential business transaction or abandon a particular business combination. The Company has not yet identified any prospective
target business. If we require funds, because of the size of the business combination, we
will be required to seek additional financing. We cannot assure you that such financing
would be available on acceptable terms, if at all. To the extent that additional financing
proves to be unavailable when needed to consummate a particular business combination, we
would be compelled to restructure the transaction or abandon that particular business
combination and seek an alternative target business candidate. In addition, if we
consummate a business combination, we may require additional financing to fund the
operations or growth of the target business. The failure to secure additional financing
could have a material adverse effect on the continued development or growth of the target
business. The Company's officer, director or stockholders are not required to provide any
financing to us in connection with or after a business combination. Additional financing
requirements associated with reporting obligations under the Exchange Act The Company has no revenues and is
dependent upon the willingness of the Company's Management to fund the costs associated
with the reporting obligations under the Exchange Act, other administrative costs
associated with the Company's corporate existence and expenses related to the Company's
business objective. The Company is not likely to generate any revenues until the
consummation of a business combination. The Company anticipates that it will have
available sufficient financial resources to continue to pay accounting and other
professional fees and other miscellaneous expenses that may be required until the Company
commence business operations in connection with a business combination. In the event that
the Company's available financial resources from its Management prove to be insufficient
for the purpose of achieving its business objective through a business combination, the
Company will be required to seek additional financing. The Company's failure to secure
additional financing could have a material adverse affect on the Company's ability to
pursue a business combination. The Company does not have any arrangements with any bank or
financial institution to secure additional financing and there can be no assurance that
any such arrangement would be available on terms acceptable and in the Company's best
interests. The Company does not have any written agreement with Management to provide
funds for the Company's operating expenses. The Company's officer and director has a 83% equity
interest in the Company and thus may influence certain actions requiring stockholder vote. It is unlikely that there will be an annual meeting of
stockholders to elect new directors prior to the consummation of a business combination,
in which case the current director will continue in office at least until the consummation
of the business combination. If there is an annual meeting, as a consequence of
Management's significant equity interest, the Company's Management has broad discretion
regarding proposals submitted to a vote by shareholders. Accordingly, the Company's
existing board of director will continue to exert substantial control at least until the
consummation of a business combination. Broad discretion of Management Any person who invests in the Company's common stock
will do so without an opportunity to evaluate the specific merits or risks of any
prospective business combination. As a result, investors will be entirely dependent on the
broad discretion and judgment of Management in connection with the selection of a
prospective business combination. There can be no assurance that determinations made by
the Company's Management will permit us to achieve the Company's business objectives. Reporting
requirements may delay or preclude a business combination Pursuant to
the requirements of Section 13 of the Exchange Act, the Company is required to provide
certain information about significant acquisitions and other material events. The Company
will continue to be required to file quarterly reports on Form 10-Q and annual reports on
Form 10-K, which annual report must contain the Company's audited financial statements. As
a reporting company under the Exchange Act, following any business combination, we will be
required to file a report on Form 8-K, which report contains audited financial statements
of the acquired entity. These audited financial statements must be filed with the SEC
within 5 days following the closing of a business combination. While obtaining audited
financial statements is typically the responsibility of the acquired company, it is
possible that a potential target company may be a non-reporting company with unaudited
financial statements. The time and costs that may be incurred by some potential target
companies to prepare such audited financial statements may significantly delay or may even
preclude consummation of an otherwise desirable business combination. Acquisition
prospects that do not have or are unable to obtain the required audited statements may not
be appropriate for acquisition because we are subject to the reporting requirements of the
Exchange Act. If the Company is deemed to be an investment
company, the Company may be required to institute burdensome compliance requirements and
the Company's activities may be restricted, which may make it difficult for the Company to
enter into a business combination.
restrictions on the nature of the Company's investments; and In addition, we may have imposed upon us burdensome
requirements, including: The Company does not believe that its anticipated
principal activities will subject it to the Investment Company Act of 1940. The Company may be deemed to have no
"Independent Director", actions taken and expenses incurred by our officer and
director on behalf of the Company will generally not be subject to "Independent
Review". Our director owns shares of our common stock and,
although no compensation will be paid to him for services rendered prior to or in
connection with a business combination, he may receive reimbursement for out-of-pocket
expenses incurred by him in connection with activities on the Company's behalf such as
identifying potential target businesses and performing due diligence on suitable business
combinations. There is no limit on the amount of these out-of-pocket expenses and there
will be no review of the reasonableness of the expenses by anyone other than our board of
director, which consist of one directors who may seek reimbursement. If our director will
not be deemed "independent," he will generally not have the benefit of
independent director examining the propriety of expenses incurred on our behalf and
subject to reimbursement. Although the Company believes that all actions taken by our
director on the Company's behalf will be in the Company's best interests, the Company
cannot assure the investor that this will actually be the case. If actions are taken, or
expenses are incurred that are actually not in the Company's best interests, it could have
a material adverse effect on our business and plan of operation and the price of our stock
held by the public stockholders. General Economic
Risks. The Company's current and
future business objectives and plan of operation are likely dependent, in large part, on
the state of the general economy. Adverse changes in economic conditions may adversely
affect the Company's business objective and plan of operation. These conditions and other
factors beyond the Company's control include also, but are not limited to regulatory
changes. Risks
Related to Our Common Stock Our historic stock
price has been volatile and the future market price for our common stock is likely to
continue to be volatile. Further, the limited market for our shares will make our price
more volatile. This may make it difficult for you to sell our common stock. The public market
for our common stock has been very volatile. Over the past three fiscal years and
subsequent quarterly periods, the market price for our common stock has ranged from $0.10
to $3.50 (See "Market for Common Equity and Related Stockholder Matters on page
12 of this annual report). Any future market price for our shares is likely to continue to
be very volatile. This price volatility may make it more difficult for you to sell shares
when you want at prices you find attractive. Further, the market for our common stock is
limited and we cannot assure you that a larger market will ever be developed or
maintained. The last reported sales price for our common stock on December 8, 2009 was
$0.11 per share. Market fluctuations and volatility, as well as general economic, market
and political conditions, could reduce our market price. As a result, this may make it
difficult or impossible for you to sell our common stock. The Company's shares of common stock are
quoted on the NASD Bulletin Board, which limits the liquidity and price of the Company's
common stock. The Company's shares of common stock are traded on the
NASD Bulletin Board, an NASD-sponsored and operated inter-dealer automated quotation
system for equity securities not included on The Nasdaq Stock Market. Quotation of the
Company's securities on the NASD Bulletin Board limits the liquidity and price of the
Company's common stock more than if the Company's shares of common stock were listed on
The Nasdaq Stock Market or a national exchange. There is currently
no active trading market in the Company's common stock. There can be no assurance that
there will be an active trading market for the Company's common stock following a business
combination. In the event that an active trading market commences, there can be no
assurance as to the market price of the Company's shares of common stock, whether any
trading market will provide liquidity to investors, or whether any trading market will be
sustained. Our common
stock is subject to the Penny Stock Rules of the SEC and the trading market in our common
stock is limited, which makes transactions in our stock cumbersome and may reduce the
value of an investment in our common stock. The Securities and
Exchange Commission has adopted Rule 3a51-1 which establishes the definition of a
"penny stock," for the purposes relevant to us, as any equity security that has
a market price of less than $5.00 per share or with an exercise price of less than $5.00
per share, subject to certain exceptions. For any transaction involving a penny stock,
unless exempt, Rule 15g-9 require: that a broker or
dealer approve a person's account for transactions in penny stocks; and In order to approve
a persons account for transactions in penny stocks, the broker or dealer must: obtain financial
information and investment experience objectives of the person; and The broker or
dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule
prescribed by the SEC relating to the penny stock market, which, in highlight form: sets forth the
basis on which the broker or dealer made the suitability determination; and Generally, brokers
may be less willing to execute transactions in securities subject to the "penny
stock" rules. This may make it more difficult for investors to dispose of our common
stock and cause a decline in the market value of our stock. Disclosure also has
to be made about the risks of investing in penny stocks in both public offerings and in
secondary trading and about the commissions payable to both the broker-dealer and the
registered representative, current quotations for the securities and the rights and
remedies available to an investor in cases of fraud in penny stock transactions. Finally,
monthly statements have to be sent disclosing recent price information for the penny stock
held in the account and information on the limited market in penny stocks. State blue sky
registration; potential limitations on resale of the Company's common stock The holders of the Company's
shares of common stock registered under the Exchange Act and those persons who desire to
purchase them in any trading market that may develop in the future, should be aware that
there may be state blue-sky law restrictions upon the ability of investors to resell the
Company's securities. Accordingly, investors should consider the secondary market for the
Registrant's securities to be a limited one. It is the
intention of the Registrant's Management following the consummation of a business
combination to seek coverage and publication of information regarding the Registrant in an
accepted publication manual which permits a manual exemption. The manual exemption permits
a security to be distributed in a particular state without being registered if the
Registrant issuing the security has a listing for that security in a securities manual
recognized by the state. However, it is not enough for the security to be listed in a
recognized manual. The listing entry must contain (1) the names of issuers, officers, and
directors, (2) an issuer's balance sheet, and (3) a profit and loss statement for either
the fiscal year preceding the balance sheet or for the most recent fiscal year of
operations. Furthermore, the manual exemption is a nonissuer exemption restricted to
secondary trading transactions, making it unavailable for issuers selling newly issued
securities. Most of the accepted manuals
are those published by Standard and Poor's, Moody's Investor Service, Fitch's Investment
Service, and Best's Insurance Reports, and many states expressly recognize these manuals.
A smaller number of states declare that they "recognize securities manuals" but
do not specify the recognized manuals. The following states do not have any provisions and
therefore do not expressly recognize the manual exemption: Alabama, Georgia, Illinois,
Kentucky, Louisiana, Montana, South Dakota, Tennessee, Vermont and Wisconsin. Dividends
unlikely The Company does not expect
to pay dividends for the foreseeable future because it has no revenues or cash resources.
The payment of dividends will be contingent upon the Company's future revenues and
earnings, if any, capital requirements and overall financial conditions. The payment of
any future dividends will be within the discretion of the Company's board of directors as
then constituted. It is the Company's expectation that future management following a
business combination will determine to retain any earnings for use in its business
operations and accordingly, the Company does not anticipate declaring any dividends in the
foreseeable future. ITEM 1B.
UNRESOLVED STAFF COMMENTS Back to Table
of Contents None. ITEM 2.
DESCRIPTION OF PROPERTIES Back to Table of Contents The Registrant's corporate office is located at 6399 Wilshire Boulevard, Suite
1019, Los Angeles, CA 90048. These facilities consist of approximately 300 square feet of executive
office space. The Registrant believes that the office facilities are sufficient for the
foreseeable future and this arrangement will remain in effect until we will consummate a
business combination. ITEM 3. LEGAL PROCEEDING Back to Table of Contents ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS None. PART II ITEM 5.
MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTER Back to Table of Contents Market
Information Our common stock is
currently quoted on the NASD Bulletin Board under the symbol ZXSI, an NASD-sponsored and
operated inter-dealer automated quotation system for equity securities not included on The
Nasdaq Stock Market. Quotation of the Company's securities on the NASD Bulletin Board
limits the liquidity and price of the Company's common stock more than if the Company's
shares of common stock were listed on The Nasdaq Stock Market or a national exchange. For
the periods indicated, the following table sets forth the high and low bid prices per
share of common stock. The below prices represent inter-dealer quotations without retail
markup, markdown, or commission and may not necessarily represent actual transactions. High Low High Low High Low First
Quarter ended March 31 $ 0.10 $ 0.10 $ $ $ 1.40 $ 0.80 Second Quarter ended June 30 $ $ $ $ $ $ Third Quarter ended September 30 $ $ $ 3.50 $ $ $ Fourth Quarter ended December 31 0.10 $ $ $ $ As of December 31, 2009, our shares of common stock were held by
approximately 2,517 stockholders of record. The transfer agent of our common stock is
Standard Registrar and Transfer Company, Inc. Dividends Holders of common
stock are entitled to dividends when, as, and if declared by the Board of Directors, out
of funds legally available therefore. We have never declared cash dividends on its common
stock and our Board of Directors does not anticipate paying cash dividends in the
foreseeable future as it intends to retain future earnings to finance the growth of our
businesses. There are no restrictions in our articles of incorporation or bylaws that
restrict us from declaring dividends. Securities
Authorized for Issuance Under Equity Compensation Plans No equity compensation plan or agreements under which our common
stock is authorized for issuance has been adopted during the fiscal year ended December
31, 2009. Sale of Unregistered
Securities On December 10, 2009, the Registrant issued
300,000 restricted shares to the Registrant's CEO in consideration
for the conversion of $24,000 in debt. ITEM 6. SELECTED FINANCIAL DATA Back to Table of Contents None. ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND PLAN OF OPERATION Back to Table of Contents Overview The Company emerged
from bankruptcy in October 2004 and discontinued its former business operations as a
result of the bankruptcy proceedings. The Company's current business objective is to seek
a business combination with an operating company. We intend to use the Company's limited
personnel and financial resources in connection with such activities. The Company
will utilize its capital stock, debt or a combination of capital stock and debt, in
effecting a business combination. It may be expected that entering
into a business combination will involve the issuance of restricted shares of capital
stock. The issuance of additional shares of our capital stock:
may significantly reduce the equity interest of our stockholders; Similarly, if we issued debt securities, it
could result in: Liquidity and Capital
Resources At
present, the Company has no business
operations and no material cash resources. We are dependent upon interim funding provided by Management or
affiliated parties to pay professional fees and expenses. Our Management and affiliated
parties have agreed to provide funding as may be required to pay for accounting fees and
other administrative expenses of the Company. If we require additional financing, we
cannot predict whether equity or debt financing will become available at terms acceptable
to us, if at all. The Company depends upon services provided by Management and affiliated
consultants to fulfill its filing obligations under the Exchange Act. At present, the
Company has limited financial resources to pay for such services and may be required to
issue restricted shares in lieu of cash. On December 31, 2009, we have had no current assets and had $108,905
in liabilities. There are no limitations in the
Company's certificate of incorporation on the Company's ability to borrow funds or raise
funds through the issuance of restricted common stock to effect a business combination.
The Company's limited resources and lack of having cash-generating business operations may
make it difficult to borrow funds or raise capital. The Company's limitations to borrow
funds or raise funds through the issuance of restricted capital stock required to effect
or facilitate a business combination may have a material adverse effect on the Company's
financial condition and future prospects, including the ability to complete a business
combination. To the extent that debt financing ultimately proves to be available, any
borrowing will subject us to various risks traditionally associated with indebtedness,
including the risks of interest rate fluctuations and insufficiency of cash flow to pay
principal and interest, including debt of an acquired business. Off-Balance Sheet
Arrangements As of December 31,
2009 we did not have any off-balance sheet arrangements as defined in
Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Act of 1934. Contractual
Obligations and Commitments As of December 31,
2009 we did not have any contractual obligations. Critical Accounting
Policies Our significant
accounting policies are described in the notes to our financial statements for the year
ended December 31, 2009 and 2008, and are included elsewhere in this annual report. ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Back to Table of Contents We have not entered
into, and do not expect to enter into, financial instruments for trading or hedging
purposes. ITEM 8. FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA Back to Table of Contents The Registrant's audited financial statements for the fiscal years
ended December 31, 2009 and 2008 are attached to this annual report. Financial
Statements for the Fiscal Year ended December 31, 2009 and 2008 ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE Back to Table of Contents None. ITEM 9A. CONTROLS AND PROCEDURES Back to Table of Contents Evaluation of Disclosure Controls and Procedures Evaluation of disclosure controls and procedures. As of December 31, 2009, the
Company's chief executive officer/chief financial officer conducted an evaluation
regarding the effectiveness of the Company's disclosure controls and procedures (as
defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act. Based upon the
evaluation of these controls and procedures, our chief executive officer/chief financial
officer concluded that our disclosure controls and procedures were effective as of the end
of the fiscal year 2009. Managements Annual Report on Internal Control Over Financial Reporting Management is responsible for establishing and maintaining adequate internal control
over financial reporting and for the assessment of the effectiveness of those internal
controls. As defined by the SEC, internal control over financial reporting is a process
designed by our principal executive officer/principal financial officer, who is also
the sole member of our Board of Directors, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of the financial statements in
accordance with U.S. generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of effectiveness to
future periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures
may deteriorate. Management has assessed the effectiveness of our internal control over financial
reporting as of December 31, 2009. In making this assessment, management used the criteria
set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)
in Internal Control-Integrated Framework. Based on our assessment and those criteria, we
have concluded that our internal control over financial reporting was effective as of
December 31, 2009. This annual report does not include an attestation report of the companys
registered public accounting firm regarding internal control over financial reporting.
Managements report was not subject to attestation by the Companys registered
public accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit the Company to provide only Managements report in this annual
report. Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting or in other
factors identified in connection with the evaluation required by paragraph (d) of Exchange
Act Rules 13a-15 or 15d-15 that occurred during the fourth quarter ended December 31, 2009
that have materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting. ITEM 9B. OTHER INFORMATION
Back to Table of Contents None. PART III ITEM
10. DIRECTORS AND
EXECUTIVE OFFICERS OF THE REGISTRANT AND CORPORATE GOVERNANCE Back to Table of Contents The following table
sets forth the names and ages of the members of our Board of Directors and our executive
officers and the positions held by each. Age 43 Ivo Heiden, 42, has been CEO, CFO and Chairman
of the Registrant since October 2004. During the last five years, Mr. Heiden has been
engaged in the business of providing corporate securities compliance service and
reorganizing distressed public companies. Mr. Heiden was CEO and Chairman of St. Lawrence
Energy Corp., a public reporting company, from January 2005 until December 2007. Mr.
Heiden served as a director of Jeantex Group, a public reporting company from August 2002
to September 2003. Mr. Heiden serves on the board of directors of Peregrine Industries,
Inc., a public reporting company from March 2004 until February 2006. Our director holds
office until the next annual meeting of stockholders and until his successors have been
duly elected and qualified. There are no agreements with respect to the election of
directors. We do not compensate our directors. Officers are appointed annually by the
Board of Directors and each executive officer serves at the discretion of the Board of
Directors. We do not have any standing committees at this time. Our director,
officer or affiliates have not, within the past five years, filed any bankruptcy petition,
been convicted in or been the subject of any pending criminal proceedings, or is any such
person the subject or any order, judgment or decree involving the violation of any state
or federal securities laws. Section 16(a)
Compliance Section 16(a) of
the Securities and Exchange Act of 1934 requires the Registrant's directors and executive
officers, and persons who own beneficially more than ten percent (10%) of the Registrant's
Common Stock, to file reports of ownership and changes of ownership with the Securities
and Exchange Commission. Copies of all filed reports are required to be furnished to the
Registrant pursuant to Section 16(a). Based solely on the reports received by the
Registrant and on written representations from reporting persons, the Registrant was
informed that its officer and director and ten percent (10%) shareholders have filed
reports required to be filed under Section 16(a). ITEM 11. EXECUTIVE
COMPENSATION Back to Table of Contents The following table
sets forth information concerning the total compensation that we have paid or that has
accrued on behalf of our chief executive officer and other executive officers with annual
compensation exceeding $100,000 during the fiscal years ending December 31, 2009, 2008 and
2007. Summary Compensation Table Long
Term Annual
Compensation Compensation
Awards Salary Bonus Year ($) ($) ($) ($) ($) ($) Executive
Employment Agreements To date, we have
not entered into any employment agreements with our executive officer. ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
SHAREHOLDER MATTERS Back to Table of Contents The following table
sets forth information regarding the beneficial ownership of our common stock as of
December 31, 2009. The information in this table provides the ownership information for:
each person known by us to be the beneficial owner of more than 5% of our common stock;
each of our directors; each of our executive officers; and our executive officers and
directors as a group. Beneficial
ownership has been determined in accordance with the rules and regulations of the SEC and
includes voting or investment power with respect to the shares. Unless otherwise
indicated, the persons named in the table below have sole voting and investment power with
respect to the number of shares indicated as beneficially owned by them. (1) Applicable
percentage ownership is based on 1,373,126 shares of common stock outstanding as of
December 31, 2009. Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment power with
respect to securities. Shares of common stock that are currently exercisable or
exercisable within 60 days of December 31, 2009 are deemed to be beneficially owned by the
person holding such securities for the purpose of computing the percentage of ownership of
such person, but are not treated as outstanding for the purpose of computing the
percentage ownership of any other person. ITEM 13. CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTORS INDEPENDENCE Back to Table of Contents During the
last two years, to the knowledge of the Company, there was no person who had or has a
direct or indirect material interest in any transaction or proposed transaction to which
the Company was or is a party. Transactions in this context relate to any transaction
which exceeds $120,000. ITEM 14. PRINCIPAL ACCOUNTING FEES
AND SERVICES Back to Table of Contents Independent Public Accountants Principal Accounting Fees Audit fees (1) Audit-related fees (2) Tax fees (3) All other fees ITEM
15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES Back to Table of Contents (a) The following documents are filed as exhibits to
this report on Form 10-K or incorporated by reference herein. Any document incorporated by
reference is identified by a parenthetical reference to the SEC filing that included such
document. SIGNATURES Pursuant to the
requirements of the Securities Exchange Act of 1934, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on the date
indicated. ZAXIS INTERNATIONAL INC. Years ended
December 31, 2009 and 2008 (Audited) F-19 F-20 F-21 F-22 F-23 F-24 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Back
to Table of Contents Michael F. Cronin To the Board of Directors and Stockholders I have audited the accompanying balance sheet of Zaxis International, Inc. as of
December 31, 2009 and 2008 and the related statements of operations, stockholders
deficiency and cash flows for the years then ended. These financial statements are the
responsibility of the Companys management. My responsibility is to express an
opinion on these financial statements based on my audit. I conducted my audits in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that I plan and perform
the audits to obtain reasonable assurance about whether the financial statements are free
of material misstatement. The company is not required to have, nor was I engaged to
perform, an audit of its internal control over financial reporting. My audit included
consideration of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal control over
financial reporting. Accordingly, I express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audits provide a reasonable basis for my
opinion. In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Zaxis International, Inc. as of December 31,
2009 and 2008 and the results of its operations, its changes in stockholders
deficiency and its cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.. April 13, 2010 /s/ Michael F. Cronin ASSETS LIABILITIES AND STOCKHOLDERS' DEFICIENCY Common
Stock Number
of Stated
Or Accumulated Shares Par Value Capital Deficit The Company Zaxis International Inc.("International") was incorporated in California in
1984 and subsequently chartered in Delaware in 1985 Bankruptcy Proceedings: On November 6, 2002, the Registrant filed a
voluntary Chapter 7 petition under the U.S. Bankruptcy Code in the U.S. Bankruptcy Court
Northern District of Ohio (case no. 02-55160. As a result of the filing, all of our
properties were transferred to a United States Trustee and we terminated all of our
business operations. The Bankruptcy Trustee has disposed of all of the assets. On October
13, 2004, the Bankruptcy Court approved an Order confirming the sale of debtor's interest
in personal property to Park Avenue Group, Inc. Basis of Presentation: We adopted "fresh-start" accounting as
of November 7, 2002 in accordance with procedures specified by AICPA Statement of Position
("SOP") No. 90-7, "Financial Reporting by Entities in Reorganization under
the Bankruptcy Code. Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates and
assumptions that affect reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statement and the reported
amounts of revenues and expenses during the reporting period. Actual results could differ
from the estimates. Cash and Cash Equivalents: For financial statement presentation purposes, the
Company considers those short-term, highly liquid investments with original maturities of
three months or less to be cash or cash equivalents. Property and Equipment New property and equipment are recorded at cost.
Property and equipment included in the bankruptcy proceedings and transferred to the
Trustee had been valued at liquidation value. Depreciation is computed using the
straight-line method over the estimated useful lives of the assets, generally 5 years.
Expenditures for renewals and betterments are capitalized. Expenditures for minor items,
repairs and maintenance are charged to operations as incurred. Gain or loss upon sale or
retirement due to obsolescence is reflected in the operating results in the period the
event takes place. Valuation of Long-Lived Assets: We review the recoverability of our long-lived
assets including equipment, goodwill and other intangible assets, when events or changes
in circumstances occur that indicate that the carrying value of the asset may not be
recoverable. The assessment of possible impairment is based on our ability to recover the
carrying value of the asset from the expected future pre-tax cash flows (undiscounted and
without interest charges) of the related operations. If these cash flows are less than the
carrying value of such asset, an impairment loss is recognized for the difference between
estimated fair value and carrying value. Our primary measure of fair value is based on
discounted cash flows. The measurement of impairment requires management to make estimates
of these cash flows related to long-lived assets, as well as other fair value
determinations. Stock Based Compensation: Stock-based awards are accounted for using the fair
value method in accordance with SFAS No. 123R, Accounting for Stock-Based
Compensation, and EITF Issue No. 96-18, Accounting for Equity Instruments that
are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling Goods or
Services. Our primary type of share-based compensation consists of stock options. We
use the Black-Scholes option pricing model in valuing options. The inputs for the
valuation analysis of the options include the market value of the Companys common
stock, the estimated volatility of the Companys common stock, the exercise price of
the warrants and the risk free interest rate. Fair Value of Financial Instruments: Statements of Financial Accounting
Standards No. 107, "Disclosures about Fair Value of Financial Instruments,"
requires disclosure of fair value information about financial instruments. Fair value
estimates discussed herein are based upon certain market assumptions and pertinent
information available to management as of April 13, 2010. The respective carrying value of
certain on-balance sheet financial instruments approximated their fair values. These financial instruments include cash and cash equivalents, accounts payable and
accrued expenses. Fair values were assumed to approximate carrying values for these
financial instruments since they are short-term in nature and their carrying amounts
approximate fair values or they are receivable or payable on demand. Earnings per Common Share: Basic net loss per share is computed using the
weighted average number of common shares outstanding during the period. Diluted net loss
per common share is computed using the weighted average number of common and dilutive
equivalent shares outstanding during the period. Dilutive common equivalent shares consist
of options to purchase common stock (only if those options are exercisable and at prices
below the average share price for the period) and shares issueable upon the conversion of
our Preferred Stock. Due to the net losses reported, dilutive common equivalent shares
were excluded from the computation of diluted loss per share, as inclusion would be
anti-dilutive for the periods presented. There were no common equivalent shares required to be added to the basic weighted
average shares outstanding to arrive at diluted weighted average shares outstanding in
2009 or 2008. Income Taxes: We must make certain estimates and judgments in determining
income tax expense for financial statement purposes. These estimates and judgments occur
in the calculation of certain tax assets and liabilities, which arise from differences in
the timing of recognition of revenue and expense for tax and financial statement purposes.
Deferred income taxes are recorded in accordance with SFAS No. 109, Accounting
for Income Taxes, or SFAS 109. Under SFAS No. 109, deferred tax assets and
liabilities are determined based on the differences between financial reporting and the
tax basis of assets and liabilities using the tax rates and laws in effect when the
differences are expected to reverse. SFAS 109 provides for the recognition of deferred tax
assets if realization of such assets is more likely than not to occur. Realization of our
net deferred tax assets is dependent upon our generating sufficient taxable income in
future years in appropriate tax jurisdictions to realize benefit from the reversal of
temporary differences and from net operating loss, or NOL, carry forwards. We have
determined it more likely than not that these timing differences will not materialize and
have provided a valuation allowance against substantially all of our net deferred tax
asset. Management will continue to evaluate the realizability of the deferred tax asset
and its related valuation allowance. If our assessment of the deferred tax assets or the
corresponding valuation allowance were to change, we would record the related adjustment
to income during the period in which we make the determination. Our tax rate may also vary
based on our results and the mix of income or loss in domestic and foreign tax
jurisdictions in which we operate. In addition, the calculation of our tax liabilities involves dealing with uncertainties
in the application of complex tax regulations. We recognize liabilities for anticipated
tax audit issues in the U.S. and other tax jurisdictions based on our estimate of whether,
and to the extent to which, additional taxes will be due. If we ultimately determine that
payment of these amounts is unnecessary, we will reverse the liability and recognize a tax
benefit during the period in which we determine that the liability is no longer necessary.
We will record an additional charge in our provision for taxes in the period in which we
determine that the recorded tax liability is less than we expect the ultimate assessment
to be. Uncertain Tax Positions The Financial Accounting Standards Board issued Interpretation No. 48, Accounting
for Uncertainty in Income Taxes an interpretation of FASB Statement No. 109,
Accounting for Income Taxes (FIN No. 48) which was effective for the
Company on January 1, 2007. FIN No. 48 addresses the determination of whether
tax benefits claimed or expected to be claimed on a tax return should be recorded in the
financial statements. Under FIN No. 48, the Company may recognize the tax
benefit from an uncertain tax position only if it is more likely than not that the tax
position will be sustained on examination by the taxing authorities based on the technical
merits of the position. The tax benefits recognized in the financial statements
from such position should be measured based on the largest benefit that has a greater than
fifty percent likelihood of being realized upon ultimate settlement. FIN No. 48
also provides guidance on derecognition, classification, interest and penalties,
accounting in interim periods and disclosure requirements. Our federal and state income tax returns are open for fiscal years ending on or after
December 31, 2006. We are not under examination by any jurisdiction for any tax year. At
December 31, 2009 we had no material unrecognized tax benefits and no adjustments to
liabilities or operations were required under FIN 48. Recent Accounting Pronouncements In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards CodificationTM
and the Hierarchy of Generally Accepted Accounting Principles (SFAS 168). SFAS
168 establishes the FASB Accounting Standards CodificationTM (the
Codification) as the single source of authoritative U.S. GAAP recognized by
the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the
SEC under authority of federal securities laws are also sources of authoritative U.S. GAAP
for SEC registrants. When effective, the Codification will supersede all existing non-SEC
accounting and reporting standards. All other non-grandfathered non-SEC accounting
literature not included in the Codification will become non-authoritative. Following SFAS
168, the FASB will not issue new standards in the form of Statements, FASB Staff
Positions, or Emerging Issues Task Force Abstracts. Instead, the FASB will issue
Accounting Standards Updates, which will serve only to: (a) update the Codification; (b)
provide background information about the guidance; and (c) provide the bases for
conclusions on the change(s) in the Codification. SFAS 168 and the Codification are
effective for financial statements issued for interim and annual periods ending after
September 15, 2009. The Company has evaluated this new statement and has determined that
it will not have a significant impact on the determination or reporting of its financial
results. In May 2009, the FASB issued SFAS No. 165, Subsequent Events
("SFAS 165"). SFAS 165 establishes guidance related to accounting for
and disclosure of events that happen after the date of the balance sheet but before the
release of the financial statements. SFAS 165 is effective for reporting periods
ending after June 15, 2009. The Company adopted SFAS 165 on January 1,
2010. SFAS 165 affects disclosures only Management does not anticipate that the
adoption of these standards will have a material impact on the financial statements. 1. Fresh Start Accounting: On November 6, 2002 all assets were transferred to the chapter 7 trustee
in settlement of all outstanding corporate obligations. We adopted "fresh-start"
accounting as of November 7, 2002 in accordance with procedures specified by AICPA
Statement of Position ("SOP") No. 90-7, "Financial Reporting by Entities in
Reorganization under the Bankruptcy Code." All results for periods subsequent to November 7, 2002 are referred to as those of the
"Successor Company". In accordance with SOP No. 90-7, the reorganized value of the Company was allocated to
the Company's assets based on procedures specified by SFAS No. 141, "Business
Combinations". Each liability existing at the plan sale date, other than deferred
taxes, was stated at the present value of the amounts to be paid at appropriate market
rates. It was determined that the Company's reorganization value computed immediately
before November 6, 2002 was $0. We adopted "fresh-start" accounting because
holders of existing voting shares immediately before filing and confirmation of the sale
received less than 50% of the voting shares of the emerging entity and its reorganization
value is less than its post-petition liabilities and allowed claims. 2. Bankruptcy Proceedings On November 6, 2002, the Registrant filed a voluntary Chapter 7
petition under the U.S. Bankruptcy Code in the U.S. Bankruptcy Court Northern District of
Ohio (case no. 02-55160). On October 13, 2004, the Bankruptcy Court approved an Order
confirming the sale of debtor's interest in personal property to Park Avenue Group Inc.
The material terms of the transaction confirmed by Bankruptcy Court authorized Park Avenue
Group to appoint new members to the Registrant's board of directors and authorized those
newly-appointed board of directors be to: The accounts of the former subsidiaries were not included in the sale and have not been
carried forward. Resultant Change in Control: Resultant Change in Control: In connection with the
Order confirming the On November 30, 2004 the board of directors approved and authorized an amendment of our
Article of Incorporation to establish a series B convertible preferred stock, par value
$0.0001 ("Series B Convertible Preferred Stock"). The holders of the Series B
Convertible Preferred Stock shall be entitled to 20 (twenty) votes on all matters
submitted to a vote of the stockholders of the Registrant. The holders of Series B
Convertible Preferred Stock shall have the right to convert each share into 20 (twenty)
shares of common stock upon their written request at any time. On December 7, 2004, the
board of directors authorized 2,000,000 shares of Series B Convertible Preferred Stock and
issued 840,000 Series B Convertible Preferred Stock that resulted in a change in control. 3. Income Taxes: Our net operating loss carryovers available to reduce future income taxes were reduced
or eliminated through our bankruptcy proceedings. We have adopted SFAS 109 which provides
for the recognition of a deferred tax asset based upon the value the loss carry-forwards
will have to reduce future income taxes and management's estimate of the probability of
the realization of these tax benefits. We have a current operating loss carry-forward of $ 19,000 resulting in deferred tax
assets of $6,000. We have determined it more likely than not that these timing differences
will not materialize and have provided a valuation allowance against substantially all our
net deferred tax asset. Utilization of federal and state NOL and tax credit carry forwards may be subject to a
substantial annual limitation due to the ownership change limitations provided by the
Internal Revenue Code of 1986, as amended and similar state provisions. The annual
limitation may result in the expiration of NOL and tax credit carry forwards before full
utilization. 4. Commitments: The Company, prior to its bankruptcy, was a party to numerous claims and threatened
litigation. As a result of the bankruptcy and the subsequent transfer by the Bankruptcy
Trustee of the Companys corporate shell entity free of all liens, claims and
encumbrances pursuant to Section 363(f) of the US Bankruptcy Code, the Company is no
longer party to any litigation. The Company is not a party to any leases and does not have any commitments 5. Stockholders' Equity: Common Stock In November, 2004, we modified our authorized shares of common stock to 100,000,000 par
value $0.0001. All issued shares of common stock are entitled to vote on a 1 share/1 vote
basis. Reverse Stock Split On July 11, 2008 we declared a reverse split of our common stock. The
formula provided that every one hundred (100) issued and outstanding shares of common
stock of the Corporation be automatically split into 1 share of common stock. Any
resulting share ownership interest of fractional shares was rounded up to the first whole
integer in such a manner that all rounding was done to the next single share and each and
every shareholder would own at least 1 share. The reverse stock split was effective for
holders of record at July 11, 2008. Except as otherwise noted, all share, option and
warrant numbers have been restated to give retroactive effect to this reverse split. All
per share disclosures retroactively reflect shares outstanding or issuable as though the
reverse split had occurred January 1, 2008. On August 15, 2008 we issued 50,000 shares in satisfaction of $12,500 due for services
rendered. The shares were valued at $0.25 per share which was managements estimate
of fair value at the time of issuance. On February 6, 2009 we issued 21,709 shares valued at $2,171 for consulting services
rendered. The shares were valued at $0.10 per share which was managements estimate
of fair value at the time of issuance. On December 10, 2009 we issued 300,000 shares to our officer in connection with the
conversion of $24,000 in debt to the officer at $0.08 per share. Preferred Stock On November, 2004 and pursuant to authority granted to it by the bankruptcy court, the
Board cancelled and extinguished all issued and outstanding preferred stock. All related
dividends obligations were also extinguished (the elimination of this preferred stock has
been reflected in the 2002 financial statements) and authorized 10,000,000 new shares of
preferred stock, $0.0001 par value that may be issued in one or more series. The Board of
Directors of the Corporation is authorized to fix the powers, preferences, rights,
qualifications, limitations or restrictions of the Preferred Stock and any series thereof
pursuant to Section 151 of the Delaware General Corporation Law. On December 7, 2004, we
issued of 840,000 shares of Series B Convertible Preferred Stock, which resulted in a
change in control. The Board of Directors of the Corporation is authorized to issue: In the event the Corporation shall at any time then in each such case the number of votes per share to which holders of shares of
Series B Convertible Preferred Stock would have been entitled to immediately prior to such
event must be adjusted by multiplying such number by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were outstanding
immediately prior to such event. The holders of Series B Convertible Preferred Stock have
the right to convert each share into 20 (twenty) shares of Common Stock upon their written
request at any time. There are no employee or non-employee options granted. 6. Convertible Note to Related party In 2009, we issued a convertible promissory note in the amount of $35,000 to our
President. The note bear interests at 12% per annum until paid or converted. Interest
is payable upon the maturity date (December 31, 2010). The initial conversion rate is
$0.10 per share (subject to standard anti-dilution provisions). The note formalized a
like amount due through the accretion of cash advances and the fair value of services
provided without cost covering several years. The convertible debt securities were issued with a non-detachable conversion feature.
We evaluate and account for such securities in accordance with EITF Issue Nos. 98-5,
00-19, 00-27, 05-02, 05-04 and 05-08, and SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities as amended. In accordance SFAS No. 133, we evaluate that the holders conversion right
provision, interest rate adjustment provision, liquidated damages clause, cash premium
option (if applicable), and the redemption option (collectively, the debt features)
contained in the terms governing the Note to determine whether they are or are not clearly
and closely related to the characteristics of the Note. Accordingly, if the features
qualify as embedded derivative instruments at issuance and, furthermore if they do or do
not qualify for any scope exception within SFAS No. 133 (paragraphs 12-32), then they
are required by SFAS No. 133 to be accounted for separately from the debt instrument
and recorded as derivative financial instruments. The values ascribed to the note, the conversion feature of the note, other potential
embedded derivative features, and common stock follow the guidance of EITF Issue No.
00-19, Accounting for Derivative Financial Instruments Indexed to, and Potentially
Settled in, a Companys Own Stock ; SFAS No. 150, Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity ; and EITF
Issue No. 00-27, Application of Issue No. 98-5 to Certain Convertible Instruments
.. The Company evaluated the embedded conversion feature and determined its effect based on
EITF Issue No. 00-19. In accordance with EITF Issue No. 00-19, a transaction which
includes a potential for net-cash settlement, including liquidated damages, requires that
derivative financial instruments, including warrants and the embedded conversion feature,
be bifurcated, and initially recorded at fair value as an asset or liability and
subsequent changes in fair value be reflected in the statement of operations. In accordance with the FASB Emerging Issues Task Force (EITF) Issue
No. 98-5 Accounting for Convertible Securities with Beneficial Conversion
Features or Contingently Adjustable Conversion Ratios and EITF Issue No. 00-27
Application of Issue No. 98-5 to Certain Convertible Instruments, we
determined that the convertible notes did not contains an embedded beneficial conversion
feature. The effective conversion price exceeded the stock price on the valuation date 7. Related Party Transactions not Disclosed Elsewhere: Fair value of services: The principal stockholder provided, without cost to the
Company, his services and office space. The total of these expenses was $36,000 for 2009
and 2008, respectively, and was reflected in the statement of operations as general and
administrative expenses. Due Related Parties: Amounts due related parties consist of corporate regulatory
compliance expenses paid directly by and cash advances received from affiliates as well as
accruals for the fair value of services described above.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM 10-K
________________________________
(Exact Name Of Registrant
As Specified In Its Charter)
Delaware
68-0080601
(State of Incorporation)
(I.R.S. Employer Identification No.)
6399
Wilshire Boulevard, Suite 1019, Los Angeles, CA
90048
(Address of Principal Executive Offices)
(ZIP Code)
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best of the
registrant's knowledge, in the definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨
Large accelerated
filer ¨
Accelerated filer ¨
Non-Accelerated
filer ¨
Smaller reporting
company x
Item
Description
3
ITEM 1A.
RISK
FACTORSA RELATED TO OUR BUSINESS
6
ITEM 1B.
UNRESOLVED STAFF
COMMENTS
11
11
11
11
12
ITEM 6.
SELECTED FINANCIAL DATA
12
13
ITEM 7A.
QUANTITATIVE AND
QUALITATIVE DISCLOSURE ABOUT MARKET RISK
13
14
14
14
ITEM 9 B.
OTHER INFORMATION
14
15
15
15
16
16
16
experience and skill
of management and availability of additional personnel;
capital requirements;
competitive position;
stage of development
of the products, processes or services;
degree of current or
potential market acceptance of the products, processes or services;
proprietary features
and degree of intellectual property or other protection of the products, processes or
services;
regulatory environment
of the industry; and
costs associated with
effecting the business combination.
result in our
dependency upon the development or market acceptance of a single or limited number of
products, processes or services.
dependent upon the
development or market acceptance of a single or limited number of products or services.
restrictions on the
issuance of securities, which may make it difficult for us to complete a business
combination.
registration as an
investment company;
adoption of a specific
form of corporate structure; and
reporting, record
keeping, voting, proxy and disclosure requirements and other rules and regulations.
the broker or
dealer receive from the investor a written agreement to the transaction, setting forth the
identity and quantity of the penny stock to be purchased.
make a reasonable
determination that the transactions in penny stocks are suitable for that person and the
person has sufficient knowledge and experience in financial matters to be capable of
evaluating the risks of transactions in penny stocks.
that the broker or
dealer received a signed, written agreement from the investor prior to the transaction.
$
$
will likely cause a
change in control if a substantial number of our shares of capital stock are issued, and
most likely will also result in the resignation or removal of our present officer and
director; and
may adversely affect
the prevailing market price for our common stock.
default and
foreclosure on our assets if our operating revenues after a business combination were
insufficient to pay our debt obligations;
acceleration of our
obligations to repay the indebtedness even if we have made all principal and interest
payments when due if the debt security contained covenants that required the maintenance
of certain financial ratios or reserves and any such covenants were breached without a
waiver or renegotiations of such covenants;
our immediate payment
of all principal and accrued interest, if any, if the debt security was payable on demand;
and
our inability to
obtain additional financing, if necessary, if the debt security contained covenants
restricting our ability to obtain additional financing while such security was
outstanding.
Name
Title
Date Became Executive
Officer
Ivo Heiden
CEO, CFO and Chairman
10/2004
Other
Restricted
Securities
Annual
Stock
Underlying
All Other
Compensation
Award(s)
Options
Compensation
Name and
Principal Position
Ivo Heiden, CEO, CFO and Chairman
(1)
2009
24,000
---
---
---
---
2008
24,000
---
---
---
---
---
2007
24,000
---
---
---
---
---
(1) Mr. Heiden became the Company's officer and
director in October 2004. Mr. Heiden's compensation for serving as the Company's officer
accrues at a rate of $2,000 a month.
Name of Beneficial Owner
Common Stock Beneficially Owned (1)
Percentage of Common Stock Owned (1)
Ivo Heiden
1,066,000
83%
6399 Wilshire
Boulevard, Suite 1019
Los Angeles, CA
90048
Juergen Heiden
72,000
6.7%
Radenkaempen 19A
17192 Waren an der
Mueritz, Germany
Director and
Officer (1 person)
1,138,000
90%
The Registrant's Board of Directors has appointed Michael F. Cronin, CPA as independent
public accountant for the fiscal year ending December 31, 2009.
The following table presents the fees for professional audit services rendered by Michael
F. Cronin, CPA for the audit of the Registrant's annual financial statements for the year
ended December 31, 2009 and
2008, and fees billed for other services rendered by Michael F. Cronin, CPA during those
periods.
Year Ended
Year Ended
December 31, 2009
December 31, 2008
$
4,000
$
4,000
---
---
---
---
---
---
(1) Audit fees consist of
audit and review services, consents and review of documents filed with the SEC.
(2) Audit-related fees
consist of assistance and discussion concerning financial accounting and reporting
standards and other accounting issues.
(3) Tax fees consist of
preparation of federal and state tax returns, review of quarterly estimated tax payments,
and consultation concerning tax compliance issues.
Exhibit No.
Description
31.1
Certification of President
and CFO pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
32.1
Certification of President
and CFO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
/s/ Ivo Heiden
Ivo Heiden
CEO, CFO and Chairman
Dated: April 15, 2010
INDEX TO FINANCIAL STATEMENTS Back to Table of Contents
Certified Public Accountant
Rochester, New York
Zaxis International Inc.
Michael F. Cronin
Certified Public Accountant
NY, FL
Zaxis International Inc.
Balance Sheets
Back to Table of
Contents
December 31, 2009
December 31, 2008
Current
assets:
Cash
$
0
$
117
Total current assets
0
117
Total Assets
$
0
$
117
Current
liabilities:
Accounts payable
$
5,500
$
2,000
Accrued expenses
1,050
0
Advances from and accruals due to related party
67,355
89,655
Total current liabilities
73,905
91,655
Convertible note
35,000
0
Total liabilities
108,905
91,655
Stockholders'
deficiency:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; none issued
Common stock, $0.0001 par value; 100,000,000 shares authorized;
1,373,126 issued and outstanding at December 31, 2009 and
1,051,417 issued and outstanding at December 31, 2008
137
105
Additional paid in capital
97,518
71,379
Accumulated deficit
(206,560)
(163,022)
Total Stockholders' Deficiency
(108,905)
(91,538)
Total Liabilities and
Stockholders' Deficiency
$
0
$
117
See Summary of Significant Accounting Policies and Notes
to Financial Statements.
Zaxis
International Inc.
Statement of Operations Back to Table of
Contents
Year Ended
Year Ended
December 31, 2009
December 31, 2008
Revenue
$
0
$
0
Costs and Expenses:
General
and administrative
42,488
Interest
1,050
52,808
Total
costs and expenses
43,538
52,808
Net
income (loss)
$
(43,538)
$
(52,808)
Basic and diluted
net loss
$
(0.04)
$
(0.05)
Weighted
average shares outstanding (basic and diluted)
1,088,413
1,018,321
See Summary of Significant Accounting Policies and Notes
to Financial Statements.
Zaxis
International Inc.
Statement of Cash Flows Back to
Table of Contents
Year ended
Year ended
December 31, 2009
December 31, 2008
Cash flows from
operating activities:
Net
loss
$
(43,538)
$
(52,808)
Expenses paid by issuance of common stock
2,171
12,500
Fair
value of services provided by related parties
36,000
36,000
Adjustments
required to reconcile net loss to cash used in operating activities:
Increase (decrease) in accounts payable and accrued expenses
4,548
1,500
Cash flows used by operating activities
(819)
(2,773)
Cash flows from
investing activities:
0
0
Cash used in investing activities
0
0
Cash flows from
financing activities:
Advances from related parties
700
2,720
Cash generated by financing activities
700
2,720
Change in cash
(119)
(53)
Cash - Beginning
of period
119
170
Cash
- End of period
$
0
$
117
See Summary of Significant Accounting Policies and Notes
to Financial Statements.
Zaxis International Inc.
Statements of Stockholders'
Deficiency Back
to Table of Contents
Additional
Paid-In
Balance
at December 31, 2007
999,332
$
100
58,884
(110,214)
Conversion of related party debt
50,000
5
12,495
-
Shares issued due to rounding
2,085
-
-
-
Net loss
-
-
-
(52,808)
Balance
at December 31, 2008
1,051,417
105
71,379
(163,022)
Shares issued for services
21,709
2
2,169
-
Conversion of related party debt
300,000
30
23,970
-
Net loss
-
-
-
(43,538)
Balance
at December 31, 2009
1,373,126
$
137
$
97,518
$
(206,560)
See Summary of Significant Accounting Policies and Notes
to Financial Statements.
Background and Significant
Accounting Policies Back to Table of
Contents
December 31, 2009
Notes to Financial Statements
December 31, 2009
amend the Article of Incorporation to change the
par value of our common and preferred stock to $0.0001;
issue up to 30,000,000 shares of common stock,
par value $0.0001 to the new management which management was appointed by the
newly-constituted board of directors;
implement a reverse split of the issued and
outstanding shares in a ratio to be determined by the board of directors;
cancel and extinguish all common share
conversion rights of any kind, including without limitation, warrants, options,
convertible bonds, other convertible debt instruments and convertible preferred stock; and
cancel and extinguish all preferred shares of
every series and accompanying conversion rights of any kind.
sale of debtor's interest in certain intangible personal property to Park Avenue Group
Inc. approved by the U.S. Bankruptcy Court Northern District of Ohio on October 13, 2004,
the Court authorized a change in control pursuant to which Ivo Heiden became our sole
director on October 13, 2004, and was appointed president by the new board of directors on
October 19, 2004. The Court order further provided that the sale was free and clear of
liens, claims and interests of others and that the sale was free and clear of any and all
other real or personal property interests, including any interests in Zaxis's
subsidiaries. The Bankruptcy Court Order provided that the existing officers and directors
were deemed removed from office and also authorized the appointment of new members to the
board of directors.
Up to two million shares of series B convertible
preferred stock, $0.0001 par value ("Series B Convertible Preferred Stock"). The
holders of the Series B Convertible Preferred Stock shall have the following voting
rights: Each share of Series B Convertible Preferred Stock shall be entitled to 20
(twenty) votes on all matters submitted to a vote of the stockholders of the Corporation.
subdivide the outstanding shares of Common
Stock,
combine the outstanding shares of Common Stock
into a smaller number of shares or
issue any of its shares of capital stock in a
reclassification of the outstanding shares of Common Stock (including any such
reclassification in connection with a consolidation or merger in which the Corporation is
the continuing or surviving entity),
I, Ivo Heiden, certify that:
1. I have reviewed this annual report of Zaxis International Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;
4. The issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as 4efined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the issuer's internal control over financial reporting that occurred during the issuer's most recent fiscal quarter (the issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the issuer's internal control over financial reporting; and
5. The issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer's auditors and the audit committee of the issuer's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether r not material, that involves management or other employees who have a significant role in the issuer's internal control over financial reporting.
Date: April 15, 2010
/s/ Ivo Heiden
CEO, CFO and Chairman
Exhibit 32
CERTIFICATION
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the annual report of Zaxis International Inc. (the Company) on Form 10-K for the year ended December 31, 2009 (the Report), as filed with the Securities and Exchange Commission on the date hereof, I, Ivo Heiden, CEO and CFO of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. The
Report fully complies with the requirements of section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended; and
2. The information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Company.
/s/ Ivo Heiden
Ivo Heiden
CEO and CFO
Dated: April 15, 2010
A signed original of this written statement required by Section 906 has been provided to Zaxis International Inc. and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.